Sex-Trafficking Suits Against Banks That Serviced Epstein Can Proceed (original) (raw)

Banks used by Jeffrey Epstein can be sued for sex trafficking, says court. A federal court says that sex-trafficking lawsuits against JPMorgan Chase and Deutsche Bank can go forward. In three separate but similar suits, the two banks are being accused of knowingly benefiting from sex trafficking by allowing Jeffrey Epstein—who killed himself in prison while awaiting a federal trial on charges of sex trafficking minors—to bank with them.

The plaintiffs—which include Epstein accusers and the government of the Virgin Islands, where Epstein had a private island—say the banks should have dropped or rejected Epstein when he was accused of or plead guilty to sex crimes. Epstein was a client of JPMorgan from 1998 through 2013 and became a client of Deutsche Bank in 2013. In 2008, Epstein pleaded guilty in Florida to soliciting a minor for prostitution. He was later accused of sex crimes involving 40 girls, but died before the resolution of that case.

The implications in these suits are chilling, no matter how unsympathetic Epstein may personally have been. They suggest that mere allegations against someone should warrant financial institutions canceling their accounts—something that seems not only unfair on its face but also likely to hamper a person's ability to defend themselves in court. A society where private businesses must reject anyone accused of crimes or face criminal liability themselves is perverse, frightening, and antithetical to civil liberties. Even the expectation that someone who had pleaded guilty to any crime should be excluded from banks doesn't seem desirable.

Banks are, of course, private institutions and allowed to reject business from whomever they choose. They have no duty to presume innocence until proven guilty. But if federal court rulings play a role in encouraging such antics, it's difficult to say how freely or coerced these private decisions really are.

To be clear, the court so far has simply said that the sex trafficking suits can proceed—not that the banks actually are liable here. But even this seems like a worrying precedent.

Alas, it's part of several larger trends that are disturbing.

The first is a push to hold banks and other financial institutions accountable for the actions of their customers. We see this in government initiatives like Operation Choke point, which urged banks not to do business with people in a number of disfavored business sectors, and in pressure from activists for banks, credit card companies, and payment processors to cut off accounts from people and businesses in the porn industry or risk being liable for any crimes therein. This trend risks giving regulators, politicians, and private busybodies a way to shut entire industries out of legal banking systems, thwarting free enterprise and free exercise of a profession without having to pass any new laws or prove any criminal action.

The second trend is trying to hold intermediaries of all sorts liable for sex trafficking. We have seen lawsuits against hotels where sex trafficking has taken place, against classified ad websites (like Backpage) where criminal sometimes posted, against software companies (like Salesforce) that serviced sex-worker friendly websites, and against social media platforms (like Twitter) where people shared links to off-site videos featuring victims. Lawyers, plaintiffs, and activists are trying to move beyond holding actual perpetrators—who tend not to have very deep pockets—accountable and instead penalize deep-pocketed third parties that simply (and unwittingly) serve as conduits for criminal activity. This trend is not only unfair to the businesses unreasonably tarred as sex traffickers and put on trial but threatens to prompt hotels, social media platforms, software companies, and others to reject (or call the cops on) all sorts of people who aren't engaged in sex trafficking merely because they look "suspicious" or seem like they're engaging in any sexual activity at all.

And both of these trends are part of a larger war on intermediaries, which more and more lawsuits, legislation, and advocates want to hold legally accountable for actions from which they're far disconnected. See, for instance, the recent Supreme Court case Gonzalez v. Google, in which the family of someone killed in a terrorist attack in Paris says YouTube (which is owned by Google) is partially responsible because it didn't entirely ban videos by the Islamic State. It's one of a huge number of actions brought under the assumption that tech companies should be able to find and completely exclude any content that might possibly be dangerous or else be held liable for any harms that could be tangentially tied to this content.

The lawsuits against JPMorgan Chase and Deutsche Bank fall into all three of these worrying trend categories.

Both banks filed motions to dismiss the suits against them. But on Monday, Judge Jed Rakoff with the the U.S. District Court for the Southern District of New York rejected their motions to dismiss the lawsuits.

"While Rakoff agreed to dismiss multiple counts of each of the cases, he allowed the other explosive counts to remain and to head toward trial," reports CNBC. "The judge wrote that he would issue an opinion explaining the reasons for his decisions 'in due course.'"

Claims that remain part of the Deutsche Bank case (Jane Doe v. Deutsche Bank Aktiengesellschaft et al.) include allegations that the defendants "knowingly benefited from participating in a sex-trafficking venture," obstructed enforcement of the Trafficking Victims Protection Act (TVPA), "negligently failed to exercise reasonable care to prevent physical harm," and "negligently failed to exercise reasonable care as a banking institution providing non-routine banking," per a March 20 order from the judge. In the other cases (Jane Doe v. JP Morgan Chase Bank and Government of the United States Virgin Islands v. JP Morgan Chase Bank), the judge allowed claims of negligence, knowingly benefitting from participating in a sex-trafficking venture, and obstructing enforcement of the TVPA to proceed.

FREE MINDS

American IQs may be shifting. A new study from Northwestern University finds that American IQ scores—which went up substantially over the course of the 20th century—have started to decline in a number of categories. Researchers looking at a large sample of IQ tests taken between 2006 and 2018 found scores in verbal reasoning (i.e., logic and vocabulary), matrix reasoning (analogies and visual problem solving), letter and number series (math and computations) had all decreased during the study period. The only category of scores that increased (between 2011 and 2018) was for spatial reasoning.

Study author Elizabeth Dworak said it doesn't necessarily mean that Americans are getting less smart. "It could just be that they're getting worse at taking tests or specifically worse at taking these kinds of tests."

It seems like it could also possibly be related to a shift in the kinds of people who took the test the data is based on. The researchers got scores from a free online personality test called the Synthetic Aperture Personality Assessment.

The study—"Looking for Flynn effects in a recent online U.S. adult sample: Examining shifts within the SAPA Project"—is forthcoming in the journal Intelligence.

FREE MARKETS

Jack Daniel's absurd lawsuit against a dog toy maker hits the Supreme Court today. The company has sued the maker of a dog toy spoof on Jack Daniel's whiskey.

The vinyl chew toys are shaped like whiskey bottles and labeled "Bad Spaniels," with a proclamation that they are "43% poo by volume, 100% smelly." They're made by VIP products, a large manufacturer of dog toys, as part of a line of "Silly Squeakers" toys that parody famous products and brands. "Jack Daniel's whiskey is not amused," notes NPR:

It has been trying, so far unsuccessfully, to stop VIP from selling the Bad Spaniels toy. On Wednesday, Jack's lawyer will tell the Supreme Court that the toy infringes on its trademark, confuses consumers and tarnishes its reputation.

As it argues in its brief: "Jack Daniel's loves dogs and appreciates a good joke as much as anyone. But Jack Daniel's likes its customers even more, and doesn't want them confused or associating its fine whiskey with dog poop."

VIP's brief comes back with a terse reply: "Freedom of speech begins with freedom to mock."

Jack Daniel's "misses the point" when it equates the Bad Spaniels toy with knock offs like marijuana-laced Oreos marketed as "Stoneos," says VIP's lawyer Bennett Evan Cooper. "There is no bottle of dog food being sold. It's a pretend trademark on a pretend label for a pretend bottle full of pretend content. The entire thing is a parody."

QUICK HITS

• "A divided Oklahoma Supreme Court on Tuesday overturned a portion of the state's near total ban on abortion, ruling women have a right to abortion when pregnancy risks their health, not just in a medical emergency," reports the Associated Press.

• The crusade against "malinformation" explicitly targets inconvenient truths.

• A massive public schools strike in Los Angeles left hundreds of thousands of students without school yesterday. "The union representing bus drivers, maintenance workers and other support staff began a three-day walkout, and the union representing the city's teachers joined the strike in solidarity," notes NPR.

• Arkansas has officially banned transgender students at the state's public schools from using bathrooms that correspond with their gender identity.

• "TikTok has never shared, or received a request to share, U.S. user data with the Chinese government. Nor would TikTok honor such a request if one were ever made," according to CEO Shou Zi Chew, who is set to testify before the House of Representatives Energy and Commerce Committee on Thursday.

• Republican Joseph Harding, a former Florida lawmaker who sponsored controversial legislation that critics dubbed the "Don't Say Gay" bill, has pleaded guilty to COVID-19 relief fraud.

• A new law in Uganda could mean merely identifying as gay could get you life in prison. "Homosexual acts are already illegal in Uganda but this bill introduces many new criminal offences," notes the BBC. "As well as making merely identifying as gay illegal for the first time, friends, family and members of the community would have a duty to report individuals in same-sex relationships to the authorities."

• The only hospital in Sandpoint, Idaho, says it will stop offering obstetrical services altogether, in part because the state's abortion ban—which does not contain an exception for when a mother's health is at risk—made it hard to retain or to recruit new doctors. "The Idaho Legislature continues to introduce and pass bills that criminalize physicians for medical care nationally recognized as the standard of care," said Bonner General Health in a statement. "Consequences for Idaho Physicians providing the standard of care may include civil litigation and criminal prosecution, leading to jail time or fines."